Coalition launches ferry privatisation

The NSW Coalition government is facing the first test of its ability to mix public ownership with private management as it pushes ahead with its plan to privatise the running of ­Sydney Ferries.

Premier
Barry O’Farrell
and Transport Minister
Gladys Berejiklian
announced yesterday that registrations of interest in operating the ferries would be sought by the government from next week.

“This is the first substantial step in the reform of Sydney Ferries,"Ms Berejiklian said in Parliament. “Our program will see the state government continue to own Sydney Ferries while allowing a non-government operator to lease, maintain and operate the fleet."

She said the government would subsidise unprofitable routes to ensure no services were scrapped.

Outsourcing the running of ferries on Sydney Harbour, also to the inner west and Parramatta, would reinstate ­hundreds of services cut under the previous Labor government and replace Sydney Ferries’ ageing fleet, Ms Berejiklian said.

Private operation would not affect fares, which would continue to be set by NSW’s Independent Pricing and Regulatory Tribunal (IPART).

The plan implements recommendations made by barrister Bret Walker, SC, after an inquiry in 2007.

Mr Walker found Sydney Ferries “consistently spent more than it has earned or received" and lacked “the management tools needed to efficiently run its operations", costing the state’s taxpayers more than $1 million a week.

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The government will face staunch opposition from the unions, which forced the Keneally government to terminate a tendering process in December 2009.

Transport operators Veolia and TransdevTSL were paid millions of dollars to compensate them for their wasted tenders.

Infrastructure Partnerships Australia chief executive Brendan Lyon said franchising public transport was “not a radical reform" and had been successfully undertaken in Victoria and Queensland, driving enhanced reliability and better services.

“Since Melbourne’s public transport network was franchised, public transport patronage has surged by 100 million trips on rail and more than 60 million on its trams," Mr Lyon said. “On the Manly route [in Sydney], competition between private operators has seen patronage surge more than threefold and has turned a loss-making government service into a popular, surging and high-quality private route that sustains two private operators fiercely competing for customers."

He said buses outside the Sydney CBD were also already franchised to private operators. The process was “about getting accountability into the public transport system", with strong financial penalties being imposed if high service standards were not met.

Opposition Leader
John Robertson
said the “sell-off" would lead to job cuts, service cuts and fare increases. “The only way for the O’Farrell government to reduce the cost of operating Sydney Ferries will be to axe jobs, cut services or massively increase fares," he said. “The government needs to come clean with the people of NSW. Which will it be, higher fares or fewer services?"

Unions NSW secretary Mark Lennon said the record of private sector operators interstate and overseas pointed to poorer reliability and service levels. “We want an assurance from the state government that commuters and workers will not be worse off as a result of this move," he said.

Tim Ayres, NSW secretary of the Australian Manufacturing Workers Union, which represents workers who maintain the ferries, said it was concerned the plan would “lead to corners being cut, compromising the safety of passengers and maintenance workers".

But the move was welcomed by business groups, including the Tourism and Transport Forum and Sydney Business Chamber.